Under what circumstances related to closing the Franchised Business can the Aplus franchisee's billing processor withhold monies?

According to the 2024 Aplus Franchise Disclosure Document, if an Aplus franchisee notifies Aplus that they are closing their franchised business, or otherwise communicates this intention to others, the franchisee's billing processor may withhold up to one-half (1/2) of the monies that would normally be payable to the franchisee. This withholding is intended to cover any post-termination obligations the franchisee may have to Aplus.

This provision serves as a protective measure for Aplus, ensuring funds are available to address any outstanding financial responsibilities or liabilities the franchisee might incur after ceasing operations. These obligations could include unpaid fees, costs associated with de-identifying the premises, or other contractual breaches. By allowing the billing processor to withhold a portion of the franchisee's funds, Aplus aims to mitigate potential financial risks associated with business closures.

For a prospective Aplus franchisee, this clause highlights the importance of understanding all potential financial obligations upon exiting the franchise system. It underscores the need for clear communication with Aplus regarding closure plans and a thorough review of the franchise agreement to fully grasp post-termination responsibilities. Franchisees should also maintain meticulous records of all payments and communications to ensure transparency and accountability during the closure process. It is also important to note that the FDD does not specify how long the billing processor can withhold funds, or what specific obligations the funds will be used for. A prospective franchisee should ask Aplus about these details.